Wed 30th Sep, 2009
When Getting More Coverage Helps You Save More
How you can reduce your insurance payments is a topic that I regularly write about. However, it’s also important that I stress that buying any policy that leaves you compromised all in the name of paying less is plain foolishness. Believe it or not, sometimes it is cheaper to buy more insurance. Let?s look at two cases…
1. Insurance policies are sold in terms of range. That is, an insurer might sell you a policy at $0.97 per $1,000 coverage if you buy between $250,000 and $499,000 while they’ll sell $1.12 per $1,000 coverage if it’s less than $250,000.
Here, you would pay $271.60 for coverage of $280K since it falls within the $250K and $499K range. On the other hand, if you purchase $240K in coverage you’ll shell out $274.40. That means that you are paying three bucks more in premium dollars for 40 grand less of coverage.
This makes it extremely important for you to check with your insurance representative and find out how much their price is per $1,000 of coverage for varied ranges. From there you can figure out what would be best for you.
2. Liability coverage is offered on both your home and auto insurance policies. If possible, get an umbrella policy and drop or reduce the other policies. The advantage for you is that your cost will be trimmed down and you will have improved coverage.
Remember what the liability part of your home and auto insurance policies cater for: To protect you from losses you could incur because of injuries to people on/by/in your property. If someone decides to sue you then you will already have protection. But like all things in insurance, there’s a limit to the amount that is covered and your auto or homeowners’ liability coverage might even be totally inadequate.
Nevertheless, an umbrella insurance policy will typically cater fully for even the most cost-intensive of lawsuits and all you’d have to pay are very affordable premiums.
An umbrella policy is under $300 annually and you can be covered for a million dollars. Add just about $75 (that’s a total of $375) to make it $2 million coverage or even buy more for just a paltry $50 per $1 million coverage after the $2 million mark.
It would cost every bit of $300 just to raise your auto liability to $100K/$300K from $25K/$50K, that?s no where near a million or better.
Look at these two patterns that occasionally you can essentially shell out a lot less by purchasing additional coverage. And whatever you do, do NOT forget to do thorough comparison shopping. The best insurance prices can only be found by doing this.